factors motivating employees in public sector banks:...

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ISSN 2286-4822

www.euacademic.org

EUROPEAN ACADEMIC RESEARCH

Vol. II, Issue 5/ August 2014

Impact Factor: 3.1 (UIF)

DRJI Value: 5.9 (B+)

Factors Motivating Employees in Public Sector

Banks: An Empirical Investigation

NAWAZ AHMAD Head of Research & Publications

Department of Business Administration & Commerce

Indus University, Karachi

Pakistan

RIZWAN RAHEEM AHMED Assistant Professor



Pakistan

RIAZ AHMED MANGI Assistant Professor

SAL University, Campus Road, Khairpur

Pakistan

RANA IMROZE PALWISHAH Research Assistant



Pakistan

ANMOOL SUSAN Department of Business Administration & Commerce


Pakistan

Abstract:

The aim of the study is to determine the Factors Motivating

employees in the Banking Sector of Pakistan with respect to their

demographic Reflections, In order to achieve the purpose the researcher

was required to get the questionnaire filled from employees working at

different organizational level in banks of Pakistan such as namely

First Women Bank, National Bank of Pakistan and Sindh Bank. In

order to get result different test were performed which shows that all

the motivational factors and Hygiene factors taken in to account which

Nawaz Ahmad, Rizwan Raheem Ahmed, Riaz Ahmed Mangi, Rana Imroze Palwishah,

Anmool Susan- Factors Motivating Employees in Public Sector Banks: An

Empirical Investigation

EUROPEAN ACADEMIC RESEARCH - Vol. II, Issue 5 / August 2014

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include “Fair wages and Promotion”, “Health and other services” ,

“Work environment” , “Job Specification”, “Prestige and Request” ,

“Management Policies and Style” , “Non-Cash Benefits”, “Sports” and

lastly “Setting and Defining Goals” play a significant role in

motivating employees. Thus helping Public banks of Pakistan to direct

their focus on the above mentioned factors in order to not only retain

employees but also increase their performance.

Key words: Motivation, Banks, Pakistan, Hygiene factors, Public

Sector.

1. Introduction

1.1 Background of the study

The concept motive is defined as a drive that leads to the

motivation of employees in the workplace. Motivation is a key

factor in social services and equally valuable to the social work

manager. Motivation is to maintain and control the behavior of

desirable actions as a stimulant. The importance of motivation

reflect simple in theory, but it is difficult to measure

experience. Payment is often enough to make the organization

of employees, but not sufficient to achieve its potential.

Motivated employees to maintain a high level of innovation,

while producing higher quality work at a higher level of

efficiency. It is empirically tested that the level of motivation is

relatively low in public sector organizations as compare to

private sector organizations in developing economies and

mainly in Pakistan. There are very few public sector

organizations that keep their employees motivated and earn

higher returns whereas banks are highly known for heavy work

load, long working hours and least motivated employees. The

gap in literature was identified to examine the factors which

are responsible for low level of motivation of employees and

their demographic reflections of public sector organizations in

Pakistan therefore this study will focus on the Banking Sector.





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Motivation "in a particular job and the employee

contribution behavior" (Kocel 2003) is defined as the basic tools

of financial rewards, incentives and psychosocial management

and organization are discussed. Inspired ideas and instruments

to encourage research refer to the description. To generate

enthusiasm by the presence of international instruments is

service organizations capable of “one size fits all”. Employees

are encouraged to work with the challenge of managing

different devices for approval and implementation.

This research study is replication to the work done by

(Safakli and Ertanin 2012), in his study he has focused on the

banking sector of Northern Cyrpus, in which he has studied the

motivation as one of the main factors that contribute to

employee presentation or the way staff perform are considered

in relation to the banking division in the northern part of

Cyprus. The results of this study indicated that the main

factors that motivate employees include, fair pay and

promotion, absolute health benefits and other social benefits

and working environment. Another important discovery of this

study was that the reward and promotion have the peak

prospective for motivating workers carry out not differs

according to demographic distinctiveness. Therefore, this

research will be repeated in public sector banks in Pakistan to

identify factors that affect the level of motivation of employees

in the banking sector.

1.2. Objectives

To examine the current level of motivation among bank

employees

To identify factors that can improve the motivation level

and employee performance of bank employees in

Pakistan

To investigate the various motivational factor available

to the employees of banking sector in Pakistan.





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1.3. Scope

Now days due to increase competition from the private sector,

the public sectors of Pakistan are looking for ways through

which they could increase the performance of their employees

and thus help them compete with the private sectors,

increasing the performance of employees is not the only issue

that public sector organizations of Pakistan are facing

nowadays another important issues is of retention of

employees, as employees dissatisfied with the public sector

easily switch to private sector banks, which further increase

their cost of doing business. This is the reason that now

banking sector is looking towards motivating employees, the

purpose of this study is to identify those specific factors that

remain constant over time thus help banks in motivating

employees, this study will not only help banking sectors but

also other organization as well as the academic researcher by

making a significant contribution to the literature.

1.4. Problem Statement

In any working environment, employees used to encounter

several impediments while working. Such impediments may

cause them to negotiate with some undesired feelings, which in

turn to make them give mediocre of exemplary towards

organizational productivity. The feeling can be deemed as

motivation, to pursue desired course of action, or exhibition of

indifference. In order to accomplish identified objectives of the

study, the researchers aim at to empirically test the “Factors

Motivating employees in the Banking Sector of Pakistan with

respect to their demographic Reflections”

1.5. Hypotheses

H1: Mean of all hygiene factors is equal to 0

H2: Mean of all motivation factors is equal to 0





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1.6. Significance / Justification

The major stakeholders of this research will be the employees of

banks who feel themselves as least motivated due to repetitive

tasks, long working hours and horizontal promotions. The other

would be banks who are facing low employee productivity and

ultimately the citizens of Pakistan who are facing low economic

development of the country.

1.7. Limitations

Within the valid scope of the research, following are the

limitations of our research:

The study is restricted to private sector as the results in

private sector may vary.

Similarly their also a geographical constraints as the

study again is limited to Karachi thus it could be

accepted that the result may vary with respect to

geographical location.

2 Literature Review

Nowadays, organizations are looking for various ways that

could help them improve the performance of employees on

which their organization success depends. This is the reason

that researchers have motivation as the focus of their studies as

according to them motivation play a significant role in

increasing the performance of their employees (Tracy 1994).

Thus is essentially one of the most important responsibility of

organization to continuously motivate the employees, But on

the major issue that organization face while motivating

employees is that, what motivates one person may not be able

to inspire others, thus organization need to identify common

motivating factors that remain still over time.

Encourage employees to understand the changing

nature of organizations has become more important.

Organizations increasingly globalized and decentralized





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structures shift from a traditional hierarchical structure to the

team concept (Erez and Eden 2001). Layoffs and life changing

employment trends, with high levels of anxiety as recognized by

Reynolds (1992) has a significant impact on the workplace. This

workplace encourages workers to develop satisfaction,

organizational commitment regarding job design and job

related activities (Vroom and Desi 1970).

An important task of leadership is an attempt to place

ability in employees to achieve organizational goals and

motivation is a vital and complex part the work (Islam and

Ismail 2008). This is in fact motivates employees to regulate

the change (Brown and Radhakrishna 1991).This enable to

understand the manager to motivate the employees to help

them to classify and solve many organizational problems

(Schaefer 1977).

According to MacMillian (2007) what motivates an

individual is difficult to determine as the preferences of vary

from one individual to other, thus one of the biggest blunders

made by managers is overestimating or underestimating the

mind of their employees.But inorder to get efficient and

effective work from the employees it is necessary for the

managers to determine what are the drivers or factors that

motivate emlployees to give their full potential (Hahn and

Klenier 2002, Westover 2008). Thus a great amount of time is

spent by managers to determine how the employees are

motivated but even with such a hard input, they still feel a lack

in getting an apparent picture of what motivates their

employees (Creech 1995).

Kovacs (1995) sought to know how changes in incentives

with in the period of 50 years affect the private sector managers

and their subordinates in the long run. This event found that

managers keep the same 10 rating factor of motivation,

thinking constantly to motivate employees, however, there is a

significant change in the attitude of their subordinates. For

instance, the subordinate sequence of motivating factors on a





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10 point rating scale vary when compared with sequences of

factors rated by managers such as the staff placed a similar

factor on fifth position which was placed by their managers on

first. This phenomenon is also hold up by Wiley (1997), he

thought, but there are some encouraging values over time, you

can order your favorite changed. Around these misconceptions,

administrators can create costly salaries and incentive plans

(Jurkiewicz, Massey and Brown 1998), so it is important to

know the real motivation.

2.1 Abraham Maslow “Theory of Needs”

"Hierarchy of Needs Theory" The support of Abraham Maslow

achieved only when the basic level, people can be motivated to

go to the next level. Physiological needs at the base of metrics

for self-realization in high (Schermerhorn 2003).

There are four categories of needs discussed by Maslow

the theory, these needs must be satisfied before a person can

achieve unresponsive.

The needs are set in a hierarchical order; the upward scale is

made by fulfilling one priority of needs which are set at their

time level. Maslow focuses on material, security, love and

Esteem needs (Ruthankoon and Ogunlana 2003) Physiological

needs are at the foundation of this range, while self-realization

is at the top. The brief descriptions on Needs are as follow.

Maslow’s Hierarchy of Needs (Em Griffin, “A First Look at Communication Theory “, McGraw-Hill)





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Physiological Needs

Safety Needs

Love and Belongingness Needs

Esteem Needs

2.1.1 Physiological needs are basic

Food, water, sleep, oxygen, sex, freedom of movement, and a

soft body temperature when one of them is in short supply, we

are too hot or too cold, sad, excited hunger, thirst, fatigue,

breath shortness, sexual frustration, jail, or are feeling pain.

These irritants compel us to seek the missing commodity

(Murphy and Athanasou 1999). So the body would rest. Maslow

saw human beings dissimilar. However, when material needs

are met they no longer important. Once the need is satisfied it

no longer motivates.

2.1.2 Safety Needs

The safety needs are mainly associated with psychological

needs which include security, peace and freedom. Once the

physical/ basic needs are met human beings automatically

shifts towards psychological needs.

2.1.3 Love and Belongingness Needs

An individual move towards love and belongings needs after he

is able to satisfy his safety needs. With love and belongingness

needs here the researcher means the need to be associated,

accepted and understood by other people living in the society.

Through the satisfaction of these needs an individual is able to

protect himself from the pain of rejection loneliness. According

to Maslow the need for love and belongingness is very delicate

and vary again from person to person as there are some

individuals for whom love, affection does not matter , whereas

some value respect more than love. Despite all of this the order

prescribed by Maslow is (Griffin, Ledbetter and Sparks 2001)

Physiological - security - Love – Esteem





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2.1.4 Esteem Needs

There are two forms of esteem needs. Self-esteem, which is

created when an individual get full command over his work,

David McClelland a psychologist from Harvard University

named it as need for achievement . According to Maslow this

shift from one need to other only arise when there is a suitable

environment provided to individuals along with the presence of

a specific personality that encourage individual to move

forward (Griffin, Ledbetter and Sparks 2001).

2.2. Herzberg Two Factor Theory

Herzberg, while conducting his study to determine what factors

satisfy and dissatisfy employees hired for white collar jobs,

found that factors that satisfy employees with their job are not

same as those factors cause them to be dissatisfied with their

jobs and thus concluded that satisfaction and dissatisfaction are

both independent from each other . (Naylor 1999). Thus

Herzberg Theory has two factors: Motivation Factor and

Hygiene Factor.

2.2.1 Hygiene factors

Hygiene Factors include those factors that cause employees to

be dissatisfied from their work environment and job

responsibilities. Examples included policy, relationship with

higher authorities, work situation, wages, company vehicle,

status, security, and relationship with staff, personal life

(Ruthankoon and Ogunlana 2003).

FIGURE: Herzberg’s view of satisfaction and dissatisfaction, Management Guide Study





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2.2.2 Motivation factors

Motivation Factor includes factors that lead to job satisfaction;

it includes development, advancement, responsibility & success.

True motivators are achievement, gratitude, work itself,

responsibility, improvement, and personal development.

Motivating factor helps subordinates to show more interest in

the present activities of job and thus make them work harder in

achieving their objectives (Leach and Westbrook 2000).

2.3. McClelland’s Need Theory

Mc Clelland (1975) need theory focuses on the personalities of

human and their development needs. He further sub-divided

this into three core categories that are necessitate for

achievement, need for affiliation and need for power.

2.3.1 Need for Achievement

The need for achievement means to have glance on the

excellence performance and challenging goals of employees.

There are two kind of employees one with high level of

achievement who prefer to avoid low risky situation and willing

to work on project with a moderate chance of winning either

alone or with high achievers as compared to people with low

level of achievement. The individual with high need of

motivation constantly look to improve themselves with the help

of feedback from their managers or authorities (Mc Clelland

1975).

2.3.2 Need for Power

The need for power is related to the people, to have influence on

them, control them, or changing their behavior and /or events,

precisely making an impact on life of others. McClelland has

further subdivided the need for power in two categories,

personal power in which individual is looking to direct or

control others actions, as compared to institutional power also

referred to social power in which individual direct the efforts of





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employees in order to achieve the objectives set by organization

(Mc Clelland 1975).

2.3.3 Need for Affiliation

The need for affiliation emphasizes the need for the

establishment of personal relationships with other. Such as

developing friendly relation with other, becoming a part of

different association, groups. People who prefer to be alone, not

associate themselves with any groups, feel comfortable in the

company of their few friends, these people have a low need of

affiliation were as the person with high need of affiliation

develop want to develop new friends, feel accepted by the

society they live in this is the reason such people perform better

in the jobs that involve greater interactions with clients (Mc

Clelland 1975).

3 Method and Material

3.1 Research Design

The research study is quantitative and descriptive in nature;

The data is collected in the form of questionnaire, which were

filled by employees working at different levels of management

in Public banks of Karachi such as Sindh Bank, National Bank

of Pakistan and First Women Bank. In the questionnaire,

factors will be covered that are in accordance with the

motivational concern such as Job description, Appraisals,

defined tasks, Salary, Work satisfaction, Environment etc. The

variables used in Questionnaire are in continuation with the

work done by (Safakli and Ertanin 2012) , as this is replication

of the study with respect to Pakistan. The variable covered in

our questionnaire are divided into two major categories;

Motivational Factors and Hygiene factors, each category will be

used to take necessary information from the respondent and it

will be easy for the researcher to calculate and eliminate the





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non-response rate and the irrelevant questionnaires filled by

Bank employees. The tool developed is a seven Likert Scale.

3.2 Population and Sample

The population for this study will be employees of Government

owned Banks in Pakistan having their head office

(administrative center) in Karachi. There are 05 Public Sector

Banks operating in Pakistan namely; National Bank, First

Women Bank, Sindh bank Ltd, Bank of Khyber and Bank of

Punjab, and three of them have their Head office in Karachi

namely; National Bank, First Women Bank and Sindh bank

Ltd, thus these three banks were chosen. Sampling techniques

used for the collection of data was Non-probability sampling;

the reason for choosing non probability sampling was lack of

sampling frame. In non-probability, convenience sampling

method for used since it was very difficult to get access to banks

and get questionnaire filled from their employees. Our sample

will contain those employees who have at least three years

banking experience. The sample size of 119 was chosen, this

was determine from the statistical formula keeping 5% level of

and Margin of Error ±9.

4 Results and Discussion

4.1 Motivational Factor

Table 1:

Factors N Mean Std. Deviation Std. Error Mean

Fair.wages 120 2.5792 .37670 .03439

Health 120 2.4792 .56003 .05112

Work.Enviroment 120 2.5354 .55883 .05101

job.specify 120 2.9194 .24059 .02196

Prestige 120 2.5750 .53620 .04895

Prestige.work 120 2.5750 .53620 .04895

Manage 120 2.9750 .14275 .01303

Non.Cash 120 2.5333 .72103 .06582

Sport 120 2.5167 .72162 .06587

Setting 120 2.4417 .60524 .05525





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T- Test was conducted with the objective to check whether

mean of all motivational factor is equal to 0 i.e. µ=0. Since the

result given in the table 2 shows that p< 0.05, thus we reject H2

concluding that µ>0 or in other words the analysis showed that

mean of all motivational factors is greater than 0.

4.2 Hygiene Factors

Table 3: One-Sample Statistics

Hygiene Factor N Mean Std. Deviation Std. Error Mean

Cmpnypolicy 120 3.25 .651 .059

Qltysupervison 120 2.93 .807 .074

Relatnwother 120 3.08 .773 .071

Personallife 120 2.46 .593 .054

Rateofpay 120 3.55 .548 .050

Jobsecurity 120 3.36 .671 .061

Workingcondition 120 2.39 1.023 .093

BLA 120 1.57 .683 .062

Table 2: One-Sample Test

Factors

Test Value = 0

T

Df

Sig.

(2-

tailed)

Mean

Difference

95%

Confidence

Interval of the

Difference

95%

Confidence

Interval of the

Difference

Lower Upper

Fair.wages 75.001 119 .000 2.57917 2.5111 2.6473

Health 48.493 119 .000 2.47917 2.3779 2.5804

Work.Enviroment 49.701 119 .000 2.53542 2.4344 2.6364

job.specify 132.929 119 .000 2.91944 2.8760 2.9629

Prestige 52.607 119 .000 2.57500 2.4781 2.6719

Prestige.work 52.607 119 .000 2.57500 2.4781 2.6719

Manage 228.294 119 .000 2.97500 2.9492 3.0008

Non.Cash 38.488 119 .000 2.53333 2.4030 2.6637

Sport 38.204 119 .000 2.51667 2.3862 2.6471

Setting 44.193 119 .000 2.44167 2.3323 2.5511





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Table 4: One-Sample Test

Hygiene Factor

Test Value = 0

T

Df

Sig. (2-

tailed)

Mean

Difference

95%

Confidence

Interval of the

Difference

95%

Confidence

Interval of the

Difference

Lower Upper

Cmpnypolicy 54.651 119 .000 3.250 3.13 3.37

Qltysupervison 39.826 119 .000 2.933 2.79 3.08

Relatnwother 43.676 119 .000 3.083 2.94 3.22

Personallife 45.442 119 .000 2.458 2.35 2.57

Rateofpay 71.000 119 .000 3.550 3.45 3.65

Jobsecurity 54.820 119 .000 3.358 3.24 3.48

Workingcondition 25.605 119 .000 2.392 2.21 2.58

BLA 25.138 119 .000 1.567 1.44 1.69

T-Test was again applied on all the hygiene factors in order to

check that whether mean of all hygiene factors is equal to µ=0;

as the table 4 shows that p< 0.05 thus we reject H1 concluding

that µ>0 in other words mean of all hygiene factors is greater

than 0 .

5 Conclusions and Recommendation

5.1 Conclusion

The analysis of the study shows that both Motivation factors

that are taken in to account namely “Fair wages and

Promotion”, “Health and other services” , “Work environment” ,

“Job Specification”, “Prestige and Request” , “Management

Policies and Style” , “Non-Cash Benefits”, “Sports” and lastly

“Setting and Defining Goals” along with Hygiene factors which

include “Company Policy” , “Quality Supervision”, “Relation

with worker” , “personal life”, “rate of pay”, “job security”,

working conditions” and “BLA” play a significant role in

motivating employees in the banking sectors. The result of this

study correlates with the previous conducted study such as

Ruthankoon and Ogunlana (2003), Mc Clelland (1975), Naylor

(1999), Leach and Westbrook (2000) according to whom the

factors cited above motivate employees to perform better thus





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helping banking sectors to direct their attention to the abve

motivating factors in order to achive organizational success.

5.2 Recommendation

As the result of the study, it is recommended that the factors

which motivate employees are the motivational and hygiene

factors besides this social facilities should be provided in the

working environment and this can build the potential in the

employees and according to the theories this is founded the

employees have their expectation with its organization and if

the organization is in the favor of the employees and motivate

them to work the staff work hard to contribute their skill and

their performance make mark in sector as well. The satisfaction

of the job show highest potential in the employees. Banks

should take the above mentioned factors in to account for its

advantages and make use of every opportunity as these factors

by making employees motivated and satisfied will help

organization to survive, grow and compete for profits in the

ever growing competitive environment.

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